To some, reducing our oil/gas consumption is desirable not so much because we're worried about running out of oil or trying to get more in taxes for government to spend, as it is avoiding having our foreign policy jerked around by petty dictators who happen to be sitting on oil fields, no longer feeling the need to go kill large numbers of Arabs from time to time to secure our oil supply, having fewer large scale ecological disasters caused by spills, and reducing atmospheric pollution.

+1 Energy independence should have been a national security priority for the past 30+ years. That is what I meant when I said we would be better off today if we started taxing in the 70s.

__________________

__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

+1 Energy independence should have been a national security priority for the past 30+ years. That is what I meant when I said we would be better off today if we started taxing in the 70s.

Cheap oil in the recent decades has sabotaged this effort. When oil producers are giving you the energy advantage, it is hard to say no.
When the Chinese are giving you manufactured goods, it is hard to say no.
When the Chinese are heavily subsidizing solar cell production does the govt help our firms also or do we let the "free" market prevail?
Short term gains. What about the long term?

Does this book talk about the ensuing food wars? It takes energy to produce the cheap food that the world is enjoying.

To some, reducing our oil/gas consumption is desirable not so much because we're worried about running out of oil or trying to get more in taxes for government to spend, as it is avoiding having our foreign policy jerked around by petty dictators who happen to be sitting on oil fields, no longer feeling the need to go kill large numbers of Arabs from time to time to secure our oil supply, having fewer large scale ecological disasters caused by spills, and reducing atmospheric pollution.

Quote:

Originally Posted by donheff

+1 Energy independence should have been a national security priority for the past 30+ years. That is what I meant when I said we would be better off today if we started taxing in the 70s.

I forgot the ...

I get the reason for higher taxes, but that money would go somewhere...
Might as well use it to ease the transition to other fuels, to other means of transportation, and to all the other things that would have to evolve to allow us to function on a high level with minimum oil...

If I were the Boss, gas would already be $20 because of increased taxes. The government needs the money, and we need to accelerate the development of alternate energy sources, preferably without the government's trying to pick winners instead of leaving it to the market. Increasing taxes on gas is the best solution.

Why does the govt need more money? They are doing a fine job with the $170 billion a month they already take in..........

__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)

The pain involved in moving toward $20/gal is very dependent upon how it takes place. Note that we have settled reasonably comfortably into the $80/bbl oil situation, but when the run up to $150 happened, it nearly crashed (arguably DID crash) our economy. If oil prices rise steadily - not in a discontinuous fashion - we will adapt for the most part.

Example 1: While cars are now capable of 25 to 30 mpg, there is no thermodynamic reason that they can not be made to operate at 100 mpg. Other sources of fuel (renewable?) will start to kick in.

Example 2: Food adaption would be relatively easy - if you don't mind eating much closer to the source (e.g., soybean protein vs. meat protein). If we cut world meat consumption by 90%, we would have grain coming out of our ears. Even using current farming (energy intensive methods) a case could be made that prices per calorie might not be much affected if we stopped producing animal protein. (I acknowledge this argument does not address food distribution - see Example 1).

$20/gal will only be the end-of-the-world if it happens suddenly. I'm not saying it won't have profound effects, but we will adapt because we must.

The nightmare scenario is if it all happens within a year or two. THAT would destroy our way of life, probably lead to war(s) and could easily lead to the end of what we currently call civilization. Again, it isn't because we can't adapt - it's because we can't adapt that rapidly. But, of course, YMMV

__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.

And then the issue of lead acid battery disposal which is already a significant environmental issue. 3 million golf carts remove 6 or 8 lead cell batteries every 3 years. And who knows how many electric cars are going to have the same issue very soon. Wind, tides, solar and a few other sources will never close the gap.

I don't think that many engineers are seriously proposing to use lead-acid batteries to power vehicles in large numbers. Electric vehicles will either run on Lithium-ion batteries or hydrogen fuel cells. It's quite the debate: hydrogen allows you to fill the car just like you do today (2 minutes at the station) whereas batteries require 15 minutes minimum even with fast-charging stations. On the other hand, hydrogen is no fun to store and will probably have to be produced with real-time electricity at the station.

If we can find a way to store hydrogen safely, then solar and wind could have a role to play in producing it. Neither is very good for keeping the lights on reliably and continuously, but for electrolysing water and storing the energy as H2, it could be useful (and localised: a station could have its own wind/solar farm to make its own hydrogen).

__________________Age 56, retired July 1, 2012; DW is 60 and working for 2 more years. Current portfolio is 2000K split 50 stocks/20 bonds/30 cash. Renting house, no debts.

Suburban property prices may drop in value... at least until infrastructure changes were made.... green car, more trains, etc.

However... $20 gas would probably make several energy and technology substitutes economically feasible... for that matter $10 gas would and consequently... demand would drop and an equilibrium achieved. It wold be disruptive... but we would have to adapt.

However... $20 gas would probably make several energy and technology substitutes economically feasible... for that matter $10 gas would and consequently... demand would drop and an equilibrium achieved. It wold be disruptive... but we would have to adapt.

I think that's where the debate is - how will people adapt and how fast? It's not a stretch to see a lot more smaller 3-cylinder engines in cars, more scooters/small motorcycles (Honda 250cc gets near 100 mpg) smaller, heavily insulated homes, and the like. There will still be a place for the Ford F250, but it'll be used only when truly needed.

$20/gallon next week would be catastrophic. But spread the increase over the next 20-30 years and it will go more easily.

Heck, I remember when I was a kid that you could get a gallon of gas for 25 cents... even when I was a young adult I could fill the car for $10 to $15...

So, in 40 to 50 years I bet gas will be $20 per gallon... without any major changes to how people do things...

We will only change when gas as a percent of our spending starts to rise.. IOW, I can pay $50 per fill up without thinking about it that much... as long as my salary goes up at the same percent I don't care if gas goes to $100 per gallon..

Heck, I remember when I was a kid that you could get a gallon of gas for 25 cents... even when I was a young adult I could fill the car for $10 to $15...

So, in 40 to 50 years I bet gas will be $20 per gallon... without any major changes to how people do things...

We will only change when gas as a percent of our spending starts to rise.. IOW, I can pay $50 per fill up without thinking about it that much... as long as my salary goes up at the same percent I don't care if gas goes to $100 per gallon..

If gas cost 5% of your budget today, and in 50 years it is $20 per gallon or more and is still 5% of your buget you will not change your behavior...

The reason that it was a problem back in the 70s and even a couple of years ago is that the cost of gas as a % of income rose... so, a rise in gas price means nothing unless your income for the analysis is fixed (or rising at a lower rate)...

Unless there is a world shortage of oil, gas won't go that high. The gas and oil lobby is pretty fierce. Also, the USA is NOT Europe. Europe is about the size of the Midwest. You can drive 5-6 hours and cross two countries. USA is 3000 miles coast to coast, not a good comparison. The USA has expanded and grown through due to cheap abundant energy.

There are some who would like us to live in cities and abandon the suburbs, but I don't think putting a huge tax on a resource we all use is going to go over well.......

__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)

If gas cost 5% of your budget today, and in 50 years it is $20 per gallon or more and is still 5% of your buget you will not change your behavior...

I got that in your first post. I think the author meant $20 in today's dollars, not discounted, to begin with.

But if you agree supply is not unlimited, demand will grow faster than supply (or at least the cheaper, easier oil fields). China, India, Brazil etc. have taken our ability to influence demand away, where it was once mostly the USA. The more supply falls behind, the faster price will increase, and the percentage of our spending will not remain the same.

Arguably it's already begun (chart). The inflation adjusted price fell from 1918 on, (1981 spike notwithstanding, we know what that was) but has it reversed since 1998, abruptly?

Latest Threads

Social Knowledge Community

About Us

This community was started in 2002 as an alternative to a then fee only Motley Fool. The focus of the discussions is on topics related to early retirement and financial independence. The community is moderated to ensure a pleasant experience for our members.